Agenda item
Approvals to Spend Report
Minutes:
The Interim Director of Finance presented the Approval to Spend report which set out the key implications of the new Procurement Bill, which needed to be enacted by 1st April 2024. It was reported that the Bill would ensure greater transparency to how Councils across the Country undertook their business.
Cabinet was informed that included within the report were the following areas:
· Key parts of the new Bill
· Transparency arrangements already in place at the Council
· Council procurement governance requirements
· An analysis of present procurements and comparison of limits against local Councils
· The proposed way forward.
The Interim Director of Finance explained that the Bill would reform the UK’s public procurement regime, making it quicker, simpler, more transparent and better able to meet the UK’s needs while remaining compliant with international obligations. It was noted that the majority of Council’s across the Country were currently not compliant in this regard.
In addition to this, it was noted that it would introduce a new regime based on value for money, competition and objective criteria in decision-making. Furthermore, it would result in a simpler and more flexible, commercial system that better met the Country’s needs. And would more effectively open up public procurement to new entrants such as small businesses and social enterprises so that they could compete for and win more public contracts.
Cabinet was informed that this was a large piece of work, however the Council had already begun to put measures in place which had resulted in the majority of the requirements under the new Bill already being met with only a few changes required for transparency purposes.
It was noted that the measures already in place included:
· No Compliance No Order which was implemented on the TechOne system on 1st April 2023. It was clarified that this would ensure that an order could not be raised unless linked to a contract or an identifiable procurement route.
· All new suppliers had to be approved by the procurement and payments teams.
· Monthly spending of over £500 was placed on the Councils Website.
· That the Council had an Electronic Purchasing Card (EPC) system for small expenditure.
· The contracts register was available to Officers, Members and the Public.
· The Procurement Team was available for monthly meetings with Heads of Service, which ensured they had visibility of what service departments were procuring to confirm contracts were set up to guarantee compliance to the ‘No Compliance No Order’ regime, as outlined above.
· Procurement training be provided to the teams on request.
· Monthly Accounts payable training delivered.
· A dedicated Procurement Teams page on the Bromsgrove District website.
The Interim Director of Finance reported that Part 6 of the Constitution set out the Scheme of Delegations, which, it was clarified set out what decisions could be delegated to Cabinet and individual Officers. The Council Constitution set out that from a financial basis a “Key Decision” was any item that had a combined financial spend (either as a single item or for the length of the contract) of £50,000. This, it was stated, included Revenue, Capital and S106 allocations.
Members were informed that Key Decisions needed to be on the Council’s forward plan. Once this had happened Cabinet decisions were actioned via a Cabinet Report and decisions delegated to Officers actioned via an Officer Decision notice.
The Council’s Procurement Pipeline, which was presently based on the Contracts Register, had been included in the report along with the initial “pipeline document”. It was reported that the Procurement Pipeline provided a forward look of potential contracting opportunities and when existing contracts were due to expire. Officers clarified that the key task of the pipeline was to allow for proper planning of procurements to ensure the Council maximised its contracting opportunities.
It was clear from the data provided from the existing contracts register that the present £50k threshold for Key Decisions covered far too many projects as many contracts last for multiple years. In addition to this, the majority of Councils had traditionally set the key decision limit at the European Union Threshold level of £179k.
Further information on Key Decision limits in respect of other Councils in Worcestershire and the wider local area was provided as follows:
o Wyre Valley - £50k
o Worcester City – £164,176 in 2017, suggests not required in present structure.
o Birmingham – Capital £1m, Revenue £500k, Chief Officers £200k
o Solihull - £500k
o Wolverhampton - £250k
The national Contracts finder level was also reported as being set at £200k.
The Interim Director of Finance reported that this report was pre-scrutinised by the Finance and Budget Working Group on 7th July 2023.
The Cabinet Member for Finance and Enabling thanked the Interim Director of Finance for his detailed report and stated that it was a positive step in terms of transparency and would tighten the procurement process for the future.
Some Members queried whether this report would be considered at the Audit, Standards and Governance Committee and it was agreed that this could be arranged for the future.
The question of using a framework to procure a contract was queried, and concerns were raised that this could prevent the Council getting the best deal for services and goods procured. The Senior Solicitor clarified that this was not the case, and the use of a framework was a route to market that meant all suppliers had been evaluated by the framework provider, such as GCloud or ESPO and completed all necessary checks and balances prior to their services being procured by the Council.
The Leader invited the Chairman of the Overview and Scrutiny Board to comment on the report and he stated that it was disappointing that the Constitution of the Council had been breached by Officers. However, he was satisfied that this was now being taken seriously and would be resolved.
Finally, the Cabinet Member for Finance and Enabling commented that although he agreed with the recommendations the use of the term ‘rogue expenditure’ could perhaps be modified for future reports as there was no evidence of impropriety in this area. He also thanked Mr. P. Carpenter and Ms. M. Howell for all their hard work in this area and for making progress to ensure that the Council’s compliance was effective.
RECOMMENDED that
2) On a quarterly basis a report “the Approval to Spend report” be provided to Cabinet which set out from the Procurement Pipeline those procurements that should be taking place over the next year. This report would be refreshed every quarter and could be converted once approved by Cabinet into the ongoing forward plan.
3) That as part of this report an analysis of spending be made of the past 3 years to identify spends with suppliers over the £200k limit to ensure this spending is converted to properly contracted expenditure and rogue expenditure be dealt with.
Supporting documents:
PDF 1 MB